Monday, March 27, 2006

Some of the top reasons that people offer for choosing organic food is their belief that it is safer, better for the environment, and some go as far as to say that it is more nutritious. Others feel that it helps promote the family farmer. Through this blog I will continually resound the theme that these notions are incorrect.

Why? First, for scientific accuracy. Second, because aside from being a fad, and aside from those organic patrons genuinely seeking health and well being, there are those cohorts of an organic movement that are motivated by an anti-capitalist and anti-agriculture agenda.

Because modern technology makes agriculture an information driven and capital-intensive industry, because this is made possible by economic growth and capitalism, and because it works so well, the modern farmer makes a difficult mascot for any socialist or interventionist agenda.

These people prefer an agriculture of the past. I’m not talking about the strong work ethic and rural values that they try to romanticize in their cause, I’m talking about mules and pitchforks. For their mascot they want the `family farmer` that milks two cows and grows sweet corn for the local market. And they want the government to subsidize that way of life. They want us to believe that only this type of organic production is healthy and sustainable.

The modern farming operation then becomes a `factory` farm and livestock management is deemed cruelty.

The truth is that this is an anathema to modern agriculture, and the most anti-agricultural stance one could take. This vision promotes the stereotype of an ignorant rural America devoid of education and technology. It then stigmatizes the modern producer that takes advantage of better education (High School FFA or College) and technology like herbicide resistant crops and improved livestock genetics.

While organic foods can offer us a fad choice and possibly a sense of nostalgia, modern agriculture will provide us with food, fiber, medicine, and perhaps energy for years to come.

Thursday, March 23, 2006

Do we need local governments to subsidize the development of farmers’ markets? Farmers in fact already have developed markets for their products-the CBOT (Chicago Board of Trade). More and more farmers are utilizing the risk management tools offered via futures markets. In addition direct contracting with buyers allows other firms to share market risk traditionally associated with agriculture.

According to the USDA, 40% of total agricultural production in 2003 (vs. just 11% in 1969), and 47% of livestock production, was accounted for by contract marketing. For small operations this accounted for 20% of their production and more than 50% of production with regards to larger operations.

Of course this mostly comprises major food staples like livestock, corn, wheat, and soybeans as opposed to produce. More so than farmers, city and local governments have stronger interests in local ‘farm’ produce markets for the sake of local tourism and to promote so called ‘green’, ‘sustainable’, or ‘organic’ agriculture (see also 'Is Organic Better').

The truth is, as agriculture has evolved into a heavily capitalized information driven industry, there are too many other profitable investment opportunities for producers to engage in as opposed to tomatoes and carrots. Investments in RTK (real-time-kinetics) technology or a GPS consulting service can save enough in production and energy costs to pay for itself sometimes within one season -and is a free market solution to environmental pollution (see 'Free Market Agriculture-Green Profits').

Livestock markets have overcome the equivalent to the age-old ‘lemon’ problem by using micro chip inserts. This technology can guarantee the identity, health, and genetics of livestock, allowing producers to receive a premium for better livestock.

It's likely that many of the ‘roadside pickup truck’ marketers are the weekend gardener types. Local governments and fad enthusiasts may be trying to capitalize on the romanciticism of old fashioned agriculture to promote tourism via pork barrel spending. I think this undermines those legitimate producers interested in transitioning from tobacco to produce, and tarnishes the image of the modern producer and the self-reliance that modern technology makes possible.

Friday, March 17, 2006

Myth: The reason the tomatoes on my salad are so pale and tasteless is that they are mass-produced or genetically engineered.

Many consumers have a negative attitude about Genetically Modified (GM) foods because they think that their perceived bad experiences with them in the past only confirm the bad press that they may have heard.

One example includes GM tomatoes. When tomatoes ripen certain enzymes begin to degrade the fruit’s cell wall (because breakdown of the fruit is necessary for seed dispersal). While this makes ripe tomatoes tender and juicy, it also makes them very susceptible to damage and disease.

There are many ways that producers try to avoid this. With organic produce you can harvest early. Buyers can then ripen them in the window seal. Conventional producers harvest early and then treat their produce with the ripening hormone ethylene. Genetically modified varieties have altered enzyme systems that allow early harvest and delayed ripening.

In every case, the end product is typically a chewy, pale, tasteless tomato. There is no way to distinguish a GM tomato from any other based on taste or appearance. Nor is there any difference in safety or nutritional quality. In fact, GM tomatoes can be produced with fewer herbicides and pesticides than conventional tomatoes ( see also 'Green Profits' and 'Is Organic Better?' ) making them much safer.

Thursday, March 02, 2006

It is easy enough to recognize that when it comes to issues regarding production and the environment that free markets and agriculture go hand in hand (see ‘Free Market Agriculture:Green Profits’ post ). But, how does one approach the issue of government funding and farm programs?

There are two things that I would like to point out regarding this issue.

1) Total spending on agriculture comprises 1% of the federal budget. Of that amount, less than half is allocated to the producer. The bulk of the rest is spent on aid to the poor and school lunch programs.

2) Despite that the funding is a small proportion of total federal spending, there are still market distortions that result from these programs.

One Iowa State University economist has pointed out that up to 1/3 of the price of farmland can be attributed to government payments. In fact many producers have expressed that government programs have increased the price of land and impeded their ability to expand their operation and remain competitive.

It seems that while many producers favor maintaining a safety net, they are also utilizing technology, crop insurance, and marketing tools to manage much of the risk characteristic to their market. In addition since agricultural production is very much an export-oriented enterprise, free trade is essential to opening up markets for food and fiber.

With the amount of lobbying and rent seeking that goes on across the board in all industries, it is not accurate to characterize the agricultural industry as having a prominent interventionist overtone. It turns out that modern agriculture is very much a free market friendly industry.

About Me

My primary interests are in applied econometrics with applications related to genomics, nutrition, health, and the environment. I have a quantitative and analytical background in the areas of applied economics and statistical genetics. I leverage my training with experience in machine learning and predictive modeling using SAS, R, and Python to solve problems. I can understand and produce peer reviewed research and discuss the application with a scientist, sales representative, or the customer whose problem ultimately drives the analysis. I can code my own estimators, execute SQL queries, parse text files, and visualize a social network.